April 24 (Bloomberg) -- The lira advanced for the first time in five days to its highest level in three weeks after the Turkish central bank vowed new measures to more than halve the inflation rate over the next year.
The lira gained 0.7 percent to 1.7831 per dollar by 5:42 p.m. in Istanbul, the strongest since April 3. That took the currency’s appreciation this year to 6.1 percent. The yield on two-year benchmark debt dropped two basis points, or 0.02 percentage point, to 9.45 percent.
The central bank is committed to reducing inflation to 5 percent by mid-2013 and the regulator will reveal new measures on April 26, Governor Erdem Basci said in an interview with Bloomberg HT on April 21 on the sidelines of the International Monetary Fund meeting in Washington. Turkey’s inflation rate held at 10.4 percent last month, close to a three-year high and the steepest among major emerging markets worldwide after Argentina’s.
“The central bank’s stance is very clear and we are seeing real money interest,” Henza Tukel, a currency trader at Turk Ekonomi Bankasi AS, said in e-mailed comments.
Inflation will peak this month before slowing in May, Basci said in an e-mailed statement on April 21. The central bank is due to release its inflation report at a press conference April 26.
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